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RSSTaking Assessment of My Portfolio in 2006, Part 4: Investment Accounts
Now I turn my annual net worth review to my taxable stock investment accounts.
I'll be honest, last year's portfolio review of my investment accounts was a rude awakening for me. The indexes had significant returns, yet I lost money for the year in my individual stock investments. It was a tough pill to swallow and killed the confidence I had that I was doing the right things.
I believe that becoming finacially free requires me to become a good investor. Last years miserable performance made me realize I still have so much to learn. I started diving into investment books and feel more expierenced and wiser, but realize I still have a ways to go.
In 2006 I reduced the amount of money I contributed (compared to years past) to my taxable stock accounts. Coming into this review, I felt these stock investments had a mediocre year, gain some, but probably still behind the market indexes.
At the end of the year, most of these investments were in my Sharebuilder account and a sizeable number of Dividend Reinvestment Plans. I will looking at my holdings in IBM (my employer) at a seperate time. This table includes my begining and ending balance, 2006 contributions, total return for 2006, and the annual rate or return for each account:
| | | | Contrib. | Return | RoR | Dietz |
| Duke DRIP | $2,303.35 | $3,016.18 | $ 350.00 | $362.83 | 15.75% | 14.64% |
| Merck DRIP | $4,192.19 | $173.24 | $ (4,018.95) | $0.00 | 0.00% | 0.00% |
| Bellsouth DRIP* | $4,122.57 | $351.22 | $ (4,798.17) | $1,026.82 | 24.91% | 59.58% |
| CMS DRIP | $807.26 | $999.44 | $ 25.00 | $167.18 | 20.71% | 20.39% |
| PG DRIP | $1,639.39 | $1,873.28 | $ - | $233.89 | 14.27% | 14.27% |
| GE DRIP | $2,990.81 | $3,222.79 | $ - | $231.98 | 7.76% | 7.76% |
| Exxon DRIP | $2,658.69 | $3,754.04 | $ 100.00 | $995.35 | 37.44% | 36.75% |
| Medtronic DRIP | $3,656.33 | $4,526.84 | $ 1,000.00 | ($129.49) | -3.54% | -3.12% |
| Etrade* | $4,718.69 | $0.00 | $ (4,718.69) | $0.00 | 0.00% | 0.00% |
| Pfizer DRIP | $13,084.33 | $16,474.18 | $ 1,030.00 | $2,359.85 | 18.04% | 17.35% |
| Lowes DRIP | $901.13 | $1,255.92 | $ 500.00 | ($145.21) | -16.11% | -12.61% |
| USG DRIP | $0.00 | $656.49 | $ 600.00 | $56.49 | NA | 18.83% |
| Sharebuilder | $0.00 | $15,591.22 | $ 12,799.64 | $2,791.58 | NA | 43.62% |
| Total | $41,074.74 | $51,894.84 | $ 2,868.83 | $7,951.27 | 19.36% | 18.70% |
Wow! These results are much better than I expected. Its really nice to see my investments begin to pay off. I would like to think that all the investment books I have been reading made the difference, but the true is most of these investments were made years ago - I have to attribute these gains to patience more than anything.
Next I will take a look at the performance of my assets/investment(s) in my employer.
| $206,990 | |
| +$65,579 | |
| +$17,504 | |
| + $1,426 | |
| + $7,951 | |
| + $9,075 | |
| Part 6: 2006 Rental Property | |
| $317,904 |
by 2million on
02/02/07
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Comments (11)
Nice work. 18.7% ROR overall is worth a gold star. Why so much $ in Pfizer? What is the catalyst that will bring about multiple expansion at a time with stagnating (and perhaps declining) sales due to patent expirations? Are you expecting acquisitions from them?
Posted by cmraynew | February 2, 2007 11:27 AM
Good job!
Now that you've identified Lowes as the big loser, do you have a plan to address it?
ML
Posted by ML | February 2, 2007 1:22 PM
He yeah - my adjustment was to buy more of it ;-). I saw the price drop as a buying opportunity.
Posted by 2 million | February 2, 2007 2:46 PM
Congratulations. I just started reading your blog. Do you have formal investment education or did you pick this up on your own? If so what has helped you the most over time?
Posted by ExecutiveOpinion | February 2, 2007 6:45 PM
nice job. how do you go about deciding which stocks to purchase?
Posted by not confucius | February 2, 2007 7:22 PM
I'm assuming these investments are unrealized gains that exist in your taxable brokerage accounts. Can you really credit yourself with the 18% ROR if you haven't taken money off the table? What happens if one day the market tumbles?
Posted by AP | February 2, 2007 10:07 PM
I'm not sure I understand AP's comment... I think 2mil can credit himself with the 18% return based on the fact that he had money in the market, and didn't try to day trade.
Posted by CPA1298 | February 3, 2007 5:39 PM
What happens if you take your money out and the market continues to rise 8 years out of 11 (just like the past 120 years)? Are you saying is until it's time to cash out and live off the money, your gain is 0% and then it's a whopping 800% in that instant 40 years from now?
Posted by MossySF | February 4, 2007 3:57 AM
Why do you need to better than the indexes? I understand that you want the most bang for your buck, but will you come up short of your goal by only using them?
Posted by Eric | February 5, 2007 9:42 AM
ExecutiveOpinion - I am a novice at best. There is a lot of references to material I have read and benfited from in this blog.
AP - I assume you mean my rate of return is lower because taxes hasn't been factored in?
Eric - thats a good point. Indexes are benchmarks that tell me that I could have done better by putting my money in index funds.
Posted by 2 million | February 5, 2007 11:51 AM
2 Million,
I'm just learning how to calculate my rates of return. In your table you've listed RoR and Dietz---is RoR Dollar Weighted Return and Deitz the Time Weighted?
Posted by JRL | March 20, 2007 10:40 PM